The Japanese yen touched a 32-year low against the US dollar after official figures showed that prices had risen faster that expected in America.
The yen fell to 147.66 against the US dollar before regaining some ground.
Japanese Finance Minister Shunichi Suzuki said the government will take “appropriate action” against the currency’s volatility.
In a rare move last month, Japan spent almost $20bn (£17.6bn) to prop up the country’s struggling currency.
“We cannot tolerate excessive volatility in the currency market driven by speculative moves. We’re watching currency moves with a strong sense of urgency,” Mr Suzuki told reporters after attending a G7 finance meeting in Washington, DC.
Last month, Japan intervened in the global currency market to help support the weakening yen.